If you want to cash in your endowment savings, selling to a broker rather than
surrendering could net you an extra £1,000.

Could your endowment policy be worth more than you think? Annual bonus payments may have been slashed, and projected payouts fallen, but some home owners are making more than £1,000 by selling on these old savings plans.

Much will depend on which endowment policy you hold. Experts say that those with Prudential, Clerical Medical or Friends Provident endowments can make some of the biggest margins, although those with a Standard Life endowment will struggle to sell it at all.

Thousands of home owners still have endowment policies, which were originally designed to pay off their mortgages. But most have performed dismally in recent years. Annual bonus payments have, in some cases, been reduced to zero, leaving investors with far smaller payouts than originally envisaged.

At the same time, most of the firms that originally sold endowments have effectively mothballed these savings plans and sold them on to so-called "zombie" fund managers, who claim to be able to run them for less money.

The only silver lining is that far fewer people are now relying on the final payout to clear their mortgage debt, thanks to rising property prices and the fact that many have switched to repayment mortgages when moving or remortgaging.

The question for those who still hold these savings plans is: what to do with them now?

For those still paying into them, there are two main options: to continue paying until the maturity date to ensure you collect the "final" bonus, or to cash in what you can today.

Those looking at the latter shouldn't just contact their insurers. Although they will give a "surrender" value – based on the contributions made to date, and investment performance – it may be possible to get a higher price by selling it to a "traded endowment" company.

These companies buy second-hand policies and sell them on, at a profit, to pension funds and City fund managers.

However, in many cases they will offer policyholders between 5pc and 6pc more than current surrender value. Alec Taylor of traded endowment firm Surrenda-Link said there had been an increase in the number of people looking to sell their policies.

A recent survey found that many sold these policies after moving home or as they approached retirement – with the money used to help boost their pensions.

However, many sales were triggered by the sudden need to find additional funds: be it a wedding, home improvements, or a change in circumstances, such as a bereavement or divorce.

Selling on an endowment is a fairly straightforward process. But not all policies can be sold. Most traded endowment companies are looking for policies that have a surrender value of at least £3,000 and have at least a year to go before the maturity date. Most are looking for policies that mature between 2015 and 2023.

Buyers are clearly looking for policies that are going to pay good final bonuses. According to Surrenda-Link, the most sought-after endowments are from Prudential, Clerical Medical, Friends Life, Legal & General, Royal London and Scottish Widows. Typically, buyers will pay between 5pc and 7pc over the surrender price for these policies.

People with Aviva policies (which will include those that were originally sold by Commercial Union, General Accident and Norwich Union) can expect to get 3pc-5pc above the surrender policy price.

Others, whose endowment is with smaller providers – such as Co-operative Insurance (CIS), Refuge, Scottish Provident and Wesylan – are likely to get slightly less (around 3pc).

But those with Standard Life policies may struggle to sell as typically buyers only want policies that are maturing within the next 24 months.

In most cases people in this position may simply want to wait and collect the final payout themselves.

Danny Cox of Hargreaves Lansdown said: "Investors need to evaluate their situation. If they need the money, then it makes sense to get the best price possible.

"Investors should remember, though, that if a traded endowment company is offering to pay significantly more than the surrender value, then there is an expectation that the endowment will pay a reasonable final bonus.

"This isn't guaranteed, but if you can, you may be better off waiting to collect the full value."

Most insurers will give you the names of companies that trade endowment policies, or you can find companies listed online.

First, you need to get an up-to-date surrender value from your provider. In order to get a comparable quote from a traded endowment provider you will need to know the name of the original provider, the policy name, the date the policy began and its maturity date.

It is advisable to contact a couple of traded endowment companies, which will then trawl the market to see whether they can get a better offer.

There is no charge for this and you are not obliged to take up any offer. If they find you a better price you simply sell it on, rather than surrender the policy. Again there is no cost.

You simply bank the cheque once the sale has been processed – which typically takes around three weeks from agreeing the sale and providing the correct documentation.

Alec Taylor of Surrenda-Link, one traded endowment company, said: "Traded endowments can be a fast, liquid asset for those who need cash in an emergency. The fact that people can get significantly more by trading rather than giving back their policies makes the 'secondary' market very attractive."

Ronald Palin banked an extra £1,000 after trading his old CIS endowment.

The policy still had five years to run, but Mr Palin decided he didn't want to keep paying into the policy, particularly as he is planning to retire early this year.

He said: "I no longer needed it to pay off the mortgage, so it seemed to make sense to stop paying into it, to reduce my monthly outgoings while using the proceeds to boost my retirement fund."

He said he was "pleasantly" surprised when he rang CIS and they gave him the details of two traded endowment companies.

"I contacted both, and the second came back with a higher offer. The whole process was very easy."